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Newk's Eatery Franchise ProfileFood Franchises > Casual Dining |
What Are the Initial Investment Requirements for a Newk's Eatery Franchise?
To open a Newk's Eatery franchise, you should be prepared for an initial investment ranging from $1,087,000 to $1,414,350. This includes a franchise fee of $40,000. Additionally, you will need to demonstrate cash reserves of $400,000 to $500,000 and a net worth between $500,000 and $1,000,000. Understanding these financial requirements is crucial for aspiring franchisees to ensure they are adequately prepared for the commitment involved.
What Are the Ongoing Fees for Newk's Eatery Franchisees?
Newk's Eatery franchisees are subject to ongoing fees that include a royalty fee of 5% on gross sales and a marketing fee of 1.75%. These fees are essential for maintaining brand standards and supporting marketing initiatives that drive customer traffic. It's important to factor these ongoing costs into your financial projections to maintain profitability over time.
What Is the Average Revenue Potential for a Newk's Eatery Franchise?
Newk's Eatery franchises have shown strong revenue potential, with an average annual revenue of approximately $2,300,562 per unit. The median annual revenue is slightly lower at $2,309,193, while revenues can range from a low of $1,133,229 to a high of $4,540,976. This variance highlights the importance of location, management, and local market conditions in determining individual franchise success.
What Is the Expected Breakeven and Payback Period for Newk's Eatery Franchisees?
Franchisees can expect to reach breakeven within about 18 months of operation, which is a relatively favorable timeline in the industry. Furthermore, the investment payback period is estimated at just 11 months, indicating a potentially quick return on investment. These metrics are appealing for entrepreneurs looking for a franchise opportunity with a solid financial outlook.
Newk's Eatery Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Newk's Eatery Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 105 | 100 | 97 |
| Net Change YoY | -5 | -3 | |
| Franchised Units | 87 | 73 | 68 |
| Net Change YoY | -14 | -5 | |
| Corporate Units | 18 | 27 | 29 |
| Net Change YoY | 9 | 2 |
Investment Overview
Newk's Eatery offers a compelling franchise investment opportunity with an initial investment ranging from $1,087,000 to $1,414,350. The franchise fee is set at $40,000, with ongoing royalty fees of 5% of gross sales and a marketing fee of 1.75%. Prospective franchisees should have liquid assets of $400,000 to $500,000 and a net worth between $500,000 and $1,000,000 to qualify for ownership.
Revenue Potential
Franchisees can expect significant revenue potential, with average annual revenue per unit reported at $2,395,505. The median annual revenue stands at $2,309,193, while the range of annual revenues varies from $1,133,229 to as high as $4,540,976. This diverse revenue spectrum indicates opportunities for growth and profitability in various market conditions.
Breakeven and Payback
Newk's Eatery franchises have an estimated breakeven time of 18 months, allowing franchisees to recover their initial investment relatively quickly. With an investment payback period of just 11 months, franchisees can anticipate a swift return on their investment, making it an attractive option for aspiring business owners.
Franchise Growth
The Newk's Eatery franchise system has experienced fluctuations in growth, with 87 franchised units in 2021, decreasing to 68 in 2023. Despite the decline in the number of franchised units, the brand continues to expand its corporate presence, increasing from 18 corporate units in 2021 to 29 in 2023, indicating a strategic focus on corporate-owned locations.
Financial Performance
The average financial performance metrics for Newk's Eatery franchises reveal a gross profit margin of 68.42%. After accounting for operating expenses, which average around $1,195,158 annually, franchisees can expect an EBITDA of approximately $373,865, representing 16.25% of revenue. This strong financial performance underscores the brand's potential for profitability.
Operational Expenses
Franchisees should be aware of the operational costs associated with running a Newk's Eatery. Labor costs, including hourly and management wages, average $637,945 annually, while other operating expenses total around $377,002. Additionally, occupancy costs are estimated at $185,211, and royalty payments contribute approximately $115,028 annually, culminating in total annual expenses of about $1,315,186.
Frequently Asked Questions
The initial investment for a Newk's Eatery franchise ranges from $1,087,000 to $1,414,350. This includes the franchise fee, equipment, and other startup costs.